Pfizer Inc. (NYSE:PFE) and Gilead Sciences, Inc. (NASDAQ:GILD) present investors with two very different forms of concentration risk. Pfizer needs newer medicines and its pipeline to offset revenue that will increasingly face generic and biosimilar competition, while Gilead has the opposite problem, where its biggest franchise is performing extremely well, but HIV accounts for roughly three-quarters of its quarterly product sales.
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Neither risk should be ignored, but their latest results make one of them easier to underwrite than the other. Let’s take a look.
Bull Case
Pfizer’s (NYSE:PFE) strongest evidence that it can manage its coming loss-of-exclusivity pressure is the performance of its newer portfolio. Second-quarter revenue excluding Comirnaty and Paxlovid increased 5% operationally, while recently launched and acquired products generated $3.2 billion and grew 18% operationally. Several medicines made contributions to this performance, with Padcev revenue increasing 23% operationally to $667 million, the Vyndaqel family generating $1.76 billion and growing 8% operationally, and Lorbrena increasing 37%.
Those gains helped Pfizer absorb another deterioration in its COVID business. Management reduced its expected 2026 COVID-product revenue from approximately $5 billion to approximately $4 billion, but stronger non-COVID performance allowed it to raise the midpoint of total revenue guidance by $500 million to $61.5 billion. Pfizer is also relying on substantial cost reductions. The company expects approximately $6.7 billion in total net savings from its cost-realignment program through 2029 and another $3 billion from its separate manufacturing-optimization program. Those remain company targets rather than realized savings, but successful execution could provide another lever for earnings.
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On the other hand, Gilead’s (NASDAQ:GILD) growth is currently stronger. Second-quarter product sales excluding Veklury increased 10% to $7.6 billion, driven partly by a 12% increase in HIV sales to $5.7 billion. Biktarvy revenue increased 7% to $3.8 billion, while Descovy jumped 48% to $967 million. Yeztugo, Gilead’s twice-yearly injectable HIV prevention medicine, generated $232 million during the quarter, compared with $15 million a year earlier.
There were also signs of growth outside HIV, as Liver-disease sales increased 10% to $877 million, including $167 million from Livdelzi, up from $78 million a year earlier. Trodelvy sales also increased 26% to $457 million. Gilead subsequently raised its 2026 product-sales guidance to $30.1 billion-$30.4 billion and increased its outlook for product sales excluding Veklury to $29.8 billion-$30.1 billion.
Bear Case
Pfizer’s (NYSE:PFE) problem that investors need to keep in mind is that the replacement challenge is already visible. Total fiscal Q2 revenue increased 3% to $15.03 billion, but operational growth was only 1%, and the company also recorded a $248 million GAAP net loss after $4.3 billion of non-cash intangible-asset impairments. More importantly, its 2026 guidance already includes an estimated $1.1 billion unfavorable revenue impact from recent and expected generic and biosimilar competition. That pressure doesn’t disappear if Pfizer cuts costs. Newer medicines and future pipeline products ultimately have to replace revenue lost as established products face competition.
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Gilead’s (NASDAQ:GILD) risk is different. HIV generated $5.69 billion of its $7.63 billion in fiscal Q2 product sales, or roughly 75%. That means investors remain heavily dependent on continued strength in a single therapeutic area, and diversifying away from that dependence has also required considerable investment. Gilead recorded $11.2 billion of acquired in-process R&D expenses during Q2, principally associated with its acquisitions of Arcellx, Tubulis and Ouro Medicines. Those transactions contributed to quarterly GAAP and non-GAAP losses per share of $8.45 and $6.75, respectively.
And oncology remains mixed for the company, as Trodelvy grew strongly, but cell-therapy sales declined 14% to $417 million amid competitive headwinds. Yescarta sales fell 12% to $346 million, while Tecartus declined 24% to $70 million. Overall oncology sales therefore increased just 3% to $873 million.
Conclusion
The difference between these risks is important. Gilead is concentrated in HIV, but that franchise is currently growing, with HIV sales increasing 12% in fiscal Q1 and Descovy growing 48%, and Yeztugo also adding another source of revenue within the franchise. The company also raised its 2026 sales outlook.
Pfizer faces a different equation where its newer products are growing, but they have to offset revenue that will increasingly encounter generic and biosimilar competition. Pfizer itself already expects a $1.1 billion headwind from that pressure in 2026. That makes Gilead’s concentration risk easier to underwrite on current operating evidence. Its dependence on HIV remains a legitimate weakness, and the expensive push into other therapeutic areas has yet to deliver uniformly strong results. But investors are being asked to depend heavily on a franchise that is presently expanding.
Pfizer, by contrast, has to replace revenue that is expected to come under pressure. Its newer portfolio and cost programs provide credible tools for doing that, but more of the investment case depends on future execution.
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This article is originally published at Insider Monkey.
